Liberum upgrades Cobham, says first-half results better than feared

(ShareCast News) - Liberum upgraded Cobham to 'buy' from 'hold' and raised the price target to 330p from 315p, saying the company's first-half results on Thursday were better than feared.It said cash conversion and the order intake have improved while the outlook was in line.Liberum said: "Defence markets are beginning to stabilise and Cobham has good exposure to long-term priority programmes."The broker noted that the shares are down 15% since it downgrade the stock to hold in January and now look more attractive.It said Cobham trades on a 2016 price-to-earnings ratio of 12x, compared with the UK aerospace and defence sector on 13.9x. It added that the stock offers an attractive dividend yield of more than 4% and a free cash flow yield in excess of 7%.On the bull side, Liberum highlighted stabilising defence markets, synergies from recent acquisitions and excellent history cash conversion, as well as a long history of dividend growth.At 1406 BST, Cobham shares were up 1.8% at 284.70p.